The US Treasury bought back $5.187 billion (£4 billion) of government bonds on Thursday, 10 September, in an expanded operation aimed at supporting liquidity in the market for longer-dated debt.
The purchase covered Treasury securities maturing in 10 to 20 years and attracted offers worth $10.489 billion, according to the results of the operation.
The Treasury had announced that it would buy up to $6 billion of bonds in the latest transaction, three times the maximum amount offered in its previous operation in the same maturity range.
The move forms part of a broader bond buyback programme designed to improve trading conditions by purchasing older and less liquid government securities from investors.
In August, the Treasury said it would at least double the size of buyback operations for longer-dated nominal coupon securities, raising the maximum from $2 billion to at least $4 billion per operation. The change took effect on 9 September and is due to remain in place for the rest of the current refunding quarter, which ends on 4 November.
The decision followed a sharp rise in long-term borrowing costs, with the yield on 30-year Treasury debt recently reaching its highest level since 2007. The Treasury said the larger operations reflected strong demand from market participants and a desire to provide greater liquidity in the longer-dated sections of the market.
